EBAY BEING SUED FOR SHILLING ITS SELLERS

[weirdid]

Consumers Sue to Stop eBay from Using “Shill” Bidding to Inflate Auction Prices
Lerach Coughlin Stoia Geller Rudman & Robbins LLP filed a class action suit in California Superior Court in Santa Clara on Feb. 18 against eBay. The Internet auction company is illegally using “shill” bidding against its own customers to force up prices, and thus increase its fees and finance service charges, a consumer suit charges.
If you purchased goods or services through eBay between February 16, 2001 and today, and are listed as both of the last two bidders in the auction you may qualify to be part of this lawsuit.

Full storey here:
http://www.lerachlaw.com/lcsr-cgi-bin/mil?templ=featured/ebay.html


weird

[mercinary]

Wow! If they have proof, that is pretty damaging. I've actually always suspected stuff like that, but how can you prove it??

-Merc

[nicoleeubanks]

This actually happened to me before on an auction. I entered by highest bid I was willing to pay and even though there were no other bidders after me I ended up paying the highest amount that I had bid. The reason it happened to me was because it was a "multiple item" auction and even though no one bid on it behind me, it required me to pay whatever amount I put in. I was ticked, but when I read over Ebay's "rules" I actually found in there where it stated they did this on multiple item auctions. Yet these read the same as any, "enter the highest amount you are willing to pay" etc. Noone knows until they find out the hard way I guess. Anyway, now that I see this I am going to try and go back and find that "rule" and paste it here so you can see what I am talking about. Though in light of the lawsuit, I wouldn't be surprised if that disappeared since I am sure this is probably one way in which they have done this to people. Anyway, if I find it again I will post it.

[nicoleeubanks]

Okay here it is, I guess they didn't remove it. Unfortunately this is one of those Ebay rules you have to learn the hard way since noone reads the entire dang rules(at least I don't see how they do). I would say this is a pretty important one. Anyway here it is below:
As a buyer, here are the basics of how an eBay auction works:


Search or browse to find an item you're interested in buying.
Take a look at the auction and decide if you wish to compete in this auction. Some things to note are:
When it ends (always in Pacific Time)

How many bids have already been placed on the item

What the current high bid is

The description (and possibly picture) of the item
Place your bid. Enter the highest amount you'd be willing to pay for the item. eBay will automatically raise your bid only as much as is needed for you to remain the high bidder. (This is called proxy bidding-and does not apply to Multiple Item Auctions.) This means that you may win an item for less than your maximum bid. But you can also be outbid if someone else enters a higher maximum bid.
If you are the highest bidder when the auction ends, you win the auction. As the winner, you are obligated to buy the item for the winning bid price.

Please tell me I am not the only one who didn't know about this. At least until I ended up having to buy THREE items at a way higher price than the starting bid and NOONE else bid on them. I don't see how that's right! :head:

[nicoleeubanks]

Oh and one last thing while I am posting so many posts- this is a Hot topic with me. Here is the link to a multiple item auction here: ebay auction (http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=31411&item=5561172936&rd=1)
Now tell me does it say down there enter your maximum bid, just like any other auction or is there a warning that says: "Hey, even if no one else bids on this you still have to pay your highest bid!" (or at least something to that effect). I think if anything this should be a good reason to sue them, but I guess since it is in their rules somewhere it makes it okay? :rolleyes:

[weirdid]

The proof is easy to find, after an auction has finished, look at the list of bidders, if the last 2 high bids are yours, ebay have screwed you for the last bid.
Knowing the way ebay cover everything in their rules, they may have a get out, but, a court may look on this practice in a different light.


weird

[dmek69]

I bought a notebook battery on one of these auctions and bid $20 as my highest bid. Granted the guy placed in the ad the battery may not work but that he purchased it in a lot of goods from another auction. I thought I had a chance at a good item. The shill I believed is this guy is from Canada, right? The other bidder was also from Canada. Coincidence? I think not, but eBay sided with him after a "supposed" long investigation which basically only wasted my time and justified theirs.

It was only $20 bucks but I hate being ripped off period and that is exactly what is was. I asked the guy for a return to which, big surprised, I never received a response.

In our talks shortly after the item was received, and I asked for my money back because the item was a dud, he said, "I don't suppose you would have given me more money if the item worked, huh?"

Who sounds like the cheat to you?

[redmist]

i always thought that when it was your username in the top 2 positions after the auction had finished, that someone else had bid and therefore your bid was automatically raised.

[avago181]

Here's a bit more about it.

EBay accused of shilling
25/02/2005

EBay has been accused of artificially inflating the price of goods sold on its site. A class action suit alleges that when a bidder increases his maximum bid limit, eBay sometimes illegally submits a bid on his behalf, even if he was already the highest bidder.

The suit, filed in California Superior Court in Santa Clara, was brought on behalf of Glenn Block and a class of bidders who purchased items on eBay during the past four years.

Block accuses eBay of raising a bid for an item he was trying to purchase from $111 to $112.50, after he responded to an e-mail warning that he had reached his maximum bid limit and was the highest bidder, according to a report by Reuters. Block says he didn’t need to pay the extra $1.50 in order to win the auction and his lawsuit accuses eBay of pitting buyers against themselves, and profiting from the increased bids.

Block's lawyer, Reed R Kathrein, said:


“While the difference often may amount to no more than a dollar or two, the volume of transactions affected – the company has approximately 51.7 million active users and approximately 126 million registered accounts – suggests that ‘winning’ bidders are collectively losing millions of dollars to eBay, its sellers and its PayPal financial arm."

It has been compared to shilling, the practice of bidding on an item with no intention of buying it, merely to raise the price. Shilling, or shill bidding, by users is strictly forbidden by eBay and may result in suspension from the site.

However, according to the lawsuit: “If a user accepts eBay’s request to provide a higher maximum bid, eBay then acts as a shill bidder on behalf of the seller at the price level of the highest former competing bidder. As a result of eBay’s hidden shill bid, eBay automatically raises the hapless buyer’s bid so as to out-bid eBay’s shill.”

The suit also alleges that eBay has violated the state’s Consumers’ Legal Remedy Act and California’s Unfair Competition Law.

EBay spokesman Hani Durzy told Reuters: "Based on what we know about what's being alleged, it appears the plaintiff completely misunderstands the functionality of the eBay bidding system."

According to the eBay web site, it can sometimes appear that a person is bidding against himself if his current high bid is between bid increments – a preset amount by which a bid will be raised each time the current bid is outdone. A minimum increment is set for different price ranges.

In this situation, says eBay, “if you were to place another bid, your bid will increase to the next round bid increment.”

The company continues: “The high bid will always try to be a full bid increment over the next highest bid. If you are currently less than one bid increment over the next highest bid, then raising your maximum bid will increase the current high bid to a full bid increment above the next highest bid.”

[redmist]

interesting reading

[MatrixWatch]

I've moved this thread over to the auction-fraud --> News stories sub-forum.